Coal block auction unlikely in 3 months: Coal secretary Anil Swarup

NEW DELHI: The government is waiting for the economy to pick up before it can auction coal mines for captive and commercial use to private companies.

"Right now markets do not justify auction of coal blocks. Last round of auction has not seen many takers," coal secretary Anil Swarup said. "I don’t see auction of coal blocks in the near future, at least in the next two to three months."

He said the framework of commercial mining has been prepared by the coal ministry.

Swarup, however, said allocation of coal blocks to state utilities for commercial use is the first step towards opening up the coal sector.

The government has invited applications from state utilities for allotment of 16 coal blocks for commercial use. Eight blocks will be awarded to state utilities within the state, while the remaining eight will be allotted to state utilities other than those in the host state, he said. Allotments are expected to be made in August after the coal ministry scrutinises the applications and decides on the winners.

The Coal Mines Special Provision Act 2015 provides for opening up commercial coal mining to private and public entities. On March 20, Parliament passed the Coal Mines Special Provisions Bill that provides for opening up commercial coal mining to Indian and foreign private firms.

So far, Indian companies with end-use plants have been allowed to mine coal for captive purposes. The Act ends the monopoly of state-run Coal India Ltd in commercial mining and allows private companies registered in India to mine and sell coal.

Swarup said the coal ministry will approach the Cabinet to consider a policy on auction of coal supply from Coal India to the power sector. He said the coal ministry asked states to buy coal from Coal India's growing stockpiles.